Daily Archives: March 2, 2016

Top 10 Reasons Small Businesses Fail

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Sturdy business plan. Dedicated staff. Strong investment base. Loyal customers. Even with all these factors, a business can fail. The reason for the failure may be the economic climate or a decrease in the need for your product. Being aware of what causes failure can help you succeed.

Failure of a business may happen unexpectedly or you may see the signs for many months before the business fails. Why businesses fail is a difficult question to answer. A business may fail due to one or many factors:

1. Running Out of Cash

A business with a strong business plan should have more than adequate cash reserves to keep the business running through good and bad times. Should your business have a slow sales month or need to hire extra employees to cover a busy holiday buying period, cash flow should be in place to cover the unexpected need.

When a business cannot recover from the unexpected, it will fail. A search for investors or a turnaround specialist may save the business.

2. Not Preparing for the Unexpected

Fraud, litigation or a change in laws may result in your business failing. Some catastrophic events, like fire, floods, and wars will be covered by insurance, while other events cannot be anticipated, and may cost more than a business has to cover it.

3. Growing Too Fast

A booming business should not be a problem, unless your business grows too fast through overtrading of stocks, or if a company grows too fast to keep up with order distribution. A business that expands more rapidly than available cash reserves will falter and may ultimately fail.

Whether you are a family owned garage door company in Pretoria, or a multi national firm, fast growth can be dangerous.

4. Not Planning Ahead

You should have a robust business plan in place to anticipate the unexpected. Cash reserves should ensure that the business operates in spite of economic downturns.

You also need a strong management team to oversee the day-to-day business and prepare it for potential crises. Without a team and a plan in place, the business will simply limp along from day-to-day. Regular strategy meetings with key staff should address real-time happenings. During these meetings devote time and resources to creating a plan for the “what ifs.”

5. Falling by the Wayside

A once thriving business may begin to make less profits than competitors. Fewer profits mean less money is invested back into the business. Fewer staff can be hired. New equipment cannot be purchased. In short, the business cannot keep up with its rivals.

6. Robbing Peter to Pay Paul

As a business falters, management may get creative with finances. Cash may be borrowed from one account to pay off a creditor. If you cannot buy supplies or materials needed for production, your company may begin to struggle. A business cannot withstand the shortfalls and poor management of resources for the long term.

7. Management Problems

There’s a saying, “One bad apple can spoil the bunch.” In good times, a bad manager or poorly run management team can be ignored. When the business is failing, a manager who won’t listen to suggestions from his team will drag down the business.

8. Not Rolling with the Punches

Business is always changing. Customers change or move to other companies. New technologies are invented. The demand for a product disappears following a health scare. It’s key to be able to quickly adapt to the changing business climate in order to thrive.

9. Not Marketing Enough

So many business owners don’t want to take some of their hard earned cash to spend on online marketing, but that’s the one thing that will help your business grow. Set aside a percent of revenues for marketing, even if it’s not much, to ensure you help spread the word about your company.

10. Not Knowing Your Customers

Your company is about your customers, not you and your preferences. If they are on social media sites, so should your business. If they want new features in your products, give them what they want. Ignoring what your customers ask for is a deadly way to quickly end your business.

Succeeding Anyway

Don’t let this list scare you. With planning and attention to your business, you will be able to thrive in even the worst economy.

Design Your Own Website

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Hiring a talented web designer is not always feasible for small businesses. Lack of time and money may mean that the custom designed website may have to wait. It is possible to design your own website, thereby by saving time and money.

Design degree or not, you know what you want your site to look like. The first step in any design process is brainstorming. Gather your team. Discuss what websites you love, and which you despise. Bad design evokes deep-seated emotions, so it’s important to avoid the elements that turn you off.

First Steps

Look at what you want the website to do. The site needs to serve the business’s purpose. Through brainstorming, determine how you will best create a website that fulfils the needs of the business and its audience.

Perhaps the site is for an organization for cancer survivors. You will want to look at organizations that focus on healthcare and well being. What are the main design features of these sites? Color? Placement of text? Use of images? Design elements?

Next Up: Website Design Software

After determining the budget available for the design, look at design software. Popular website design software includes: Macromedia Dreamweaver and Microsoft Front Page. Both software programs require a high level of competency to execute a website design. If no one on your team has design expertise, consider designating one person as the “designer-in-training.” The budding designer should take a class focused on one of these design programs. Check local colleges and universities for available classes.

Watch out for web design software that requires a high-level of expertise to create an attractive finished website. If cost is an issue and a group of people will work on the site simultaneously, find out the cost of multiple site licenses.

If you do not have design expertise, consider DIY — do-it-yourself services. Do a web search to determine what free software is available.

With SnapPages, you can design a site in a few hours. Website owners can make changes to the site easily as there is no coding necessary. SnapPages offers a free account, but upgrading to the paid version is recommended.

Other website building tools are:

Yola.com — you can integrate photos from Flickr and your PayPal shopping cart, and Google Maps can be added to your site. Yola’s drag-and-drop text and easy editing tools are easy to use. Try the free version, then upgrade for $49.95/year for a year’s worth of extra features.

With Weebly.com, you can choose from 70 designs or customize your own. Adding extra touches like video, photos, or music is a snap. Weebly is free, with an upgrade available.

With WordPress.org, you can create a blog or a website on a WordPress theme and many free or inexpensive templates are available. WordPress is free, but you will need to purchase a domain name.

Content Is Key

Where would a website be without strong webcopy? In an online environment, less is more.

Keep paragraphs short. Write headings that ask the reader to do something…a call to action. You might want the consumer to buy the product, take a poll, participate in a focus group, or simply tweet a link to a website to his social media network.

Graphic elements must tell the company’s story. While it is fun to upload every widget and gadget known to man to your website, carefully assess each graphic. A map of the world showing where customers to the site live works if the map is a mass of red pinpoints, illustrating your global reach.

Design Elements to Try

Once a basic template has been created, you can test drive the site. Remember, the website is the first step of your customer’s journey. Your customer may have found the site through a word-of-mouth contact from friends, through a web search or by happenstance. Whatever way your customer arrives on your site, keep them there as long as possible.

Make your site professional looking with strong colors, clean design, and lack of clutter. The strong colors, which include red and blue, will draw the customer to the site. Avoid pastels…they’re too wishy washy. A clean design lacking in clutter will encourage a visitor to explore more of your website.

When it comes to photos, the more is not the merrier. Do you have one stunning photo of your product or three so-so photos? Go with a single photo instead of many photos for a more appealing and professional effect.

Draw the customer in to the website with clear brand identification. If every branch of the company uses a slight variation of the same company logo, decide on a universal logo. Use the universal logo on all outgoing correspondence, publications and the website.

Customers need a method to contact your company. The “Contact Us” tab should be prominent, easy to access and placed on the home page.

Links. Must. Work. Is there anything more frustrating than clicking a link on a website for “Sales” only to find an Error Page? Test all links.

Final Countdown

Before formally launching the newly designed site, do a test drive…in fact do several. Have your employees, friends and family test the site. Can a customer find the “Sales” link easily? Is the “Contact Me” tab readily accessible?

Once all kinks are worked out, you’re ready to start sharing your new site!

As a final note, consider hiring a digital marketing company, or a seo agency to help get your potential customers to your site.

The Psychology of Selling

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“I need it!” The urge to buy a product is a desire. Often products are not needed or necessary to our lives, but we know we need it. Why do your customers buy from you?

The customer is the lifeblood of a business. He wants your products. You are only too glad to supply products that he wants. But, what if he decides to buy from your competitor? Or she has a bad experience with customer support? In other words, how do you successfully sell your wares to people?

You can design a product. Manufacture it. Mass produce it. Ship it to retail locations where the retailer will place it on a shelf. But, the product could be left on the shelf for weeks and months. What are the operative methods for selling?

Why Do We Buy?

The reason for buying some products is to satisfy basic needs. We need food to survive. But, there are variations in the type of food we buy. Depending on your diet or culture or nationality, the staples may include bread, milk, eggs, cheese, meat, fruits, and vegetables. Some cultures may substitute rice for the bread or opt out of milk in favor of water. Basic food is a necessity.

The old saying goes that “Man cannot survive by bread alone.” As consumers, we crave variety. We want peanut butter for our bread. crackers with our cheese, and a variety of sauces for our meats. We’re not satisfied with the basics, are we? We want more.

From homes to cars to boats to designer duds to you-name-it, we want to buy it. With the many varieties of stuff on the market, let’s look at the psychology of selling. Why are we motivated to buy Product A rather than the equally fabulous Product B?

What Is the Psychology of Selling?

Successful selling requires four basic steps, also know as AIDA:

  1. Attention or arouse the curiosity of your customers by drawing attention to your product.
  2. Interest in doing something about it.
  3. Desire for one product or service in particular
  4. Action — your customer needs to take action to buy the product.

Customers are attracted by signs, musical jingles on the radio, a recorded message on the company’s customer service line, direct mail, pop up ads, and many more instances where a brand gets its image in front of a customer. From the company website to social media like Twitter and Facebook, to good old word-of-mouth marketing, the company’s message needs to get across to consumers.

You can attract the attention of a customer through advertising. Advertising is a method for conveying the company’s message. Never underestimate the power of an ad. The multimillion dollar Super Bowl ads and the teeny tiny ad for the oil change business in your newspaper have one thing in common: both ad attract the attention of your customer. Ads serve as a memory trigger. For instance, say you need to shop for a BBQ. As you peruse the cans, you’ll see a can of Bush’s beans and think of the dog who knows the secret recipe. The memory of the commercial gives you happy feelings. The slam dunk of the ad occurs when you places the can in the cart. The company has successfully transferred the company’s message to you, the consumer through the psychology of selling.

Once you have attracted the attention of the prospective buyer, you need to establish a level of interest for the product. What does the customer want? Why does she need it? How will you make your product become the first thing that comes to mind when she thinks of mouthwash.

With your customer’s interest piqued, you can give him more reasons to buy the product. If a product was packaged in a brown paper bag and placed on a shelf, the customer would not know what the product was. We want to touch, squeeze, examine, and investigate our purchases. From squeezing the tomato to thumping the watermelon, we want to know we are getting a good deal. A flashy website for a shoddy product will lead to a surge in customer returns.

First create a fabulous product. Safety test it. Show it to peer review groups. Design packaging that tells the consumer immediately what he is buying. Give the customer a reason to pick up the package or click “Buy” on the website. Oh, and don’t forget to send the product to bloggers to review and promote on their blogs and to their social media audiences on Twitter and Facebook.

A consumer may desire a product. The customer may not be able to explain why she needs it. All she knows is that she must have it. This coveted product may be completely frivolous and ridiculous.

Do you really need a Snuggie? Wouldn’t an honest-to-goodness blanket work just as well? Our desire for a Snuggie stems from the ad. Perhaps the girl in the TV ad looked super snug and warm in her Snuggie. Was it the leopard print that piqued your interest in purchasing one? Or, maybe you want to get one for your elderly mother who likes to read in her chair, but can’t hold her book while a blanket covers her hands. Whatever the reason, you will reach for the phone, dial the number, order the blanket, and wait eagerly for the FedEx truck to deliver it.

“Ahhh…my Snuggie is here!”

The action of calling and ordering is the end game in a chain reaction that began with the ad or sign or recorded message on a call or icon on a website.

Selling is a psychological game, and one none of us are immune to.